Property giant British Land Company Plc has made a £1.1billion loss as retail continues to nosedive – and the figures only just cover the start of the coronavirus lockdown.
The company, where bosses have taken a 20% pay cut and given the cash to charity and to help staff at retailers struggling due to the Covid-19 pandemic, has seen its after-tax loss widen to £1,114million from a loss of £320million a year earlier.
The figures are for the year to the end of March 2020, which only includes just over a week of the lockdown.
British Land’s results do claim a “resilient” underlying profit of £306million, which is down from £340million, but there are signs the virus crisis will deliver a further body blow to the company which has given tenants a costly rent holiday.
Already, the three-month release from rental obligations for small shops, restaurants, cafes and other leisure businesses has lost British Land £2million in rent.
And £35million of rental income has been deferred for tenants experiencing financial challenges as a result of Covid-19. The overall portfolio value is also down 10.1%, mainly due to a 26.1% slump in retail.
In April, British Land’s board of directors decided to waive 20% of their base salaries or fees for an initial period of three months from April 1, and will allocate this cash to its Community Investment Fund “to support those most in need” including workers whose livelihoods have been affected”.
The company's huge portfolio includes Meadowhall shopping centre in Sheffield, the Broadgate Estate development in London, and the Drake Circus Shopping Centre and neighbouring The Barcode leisure complex in Plymouth. It owns Debenhams stores including those in Cardiff and Chester and retail parks across the country including Mostyn Champneys in Llandudno.
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Chris Grigg, chief executive, said: "Like businesses around the world, in recent months our focus has been on responding to the unprecedented challenges brought about by Covid-19.
“We have acted quickly and effectively to support our customers, partners and local communities and to protect the long term value of our business.
“Throughout this time, the safety and wellbeing of our team has been our key priority. Now, more than ever, we are benefiting from their expertise and experience and across our business, they have demonstrated their commitment, resilience and good humour for which I and the board are extremely grateful.
“Over the year we made further good operational and strategic progress and this stands us in good stead today. We have continued to lease well in London and committed developments are close to completion and nearly full, locking in £54million future rents.
“We have a resolution to grant planning at Canada Water and opportunities throughout our pipeline which we can progress when the time is right.
“This was already a difficult year for retailers, many of whom have been severely impacted by the lockdown and the early effects of the crisis were reflected in the value of our retail portfolio.
“More broadly, we expect the major trends that inform our strategy to accelerate. This includes the shift to online retail, reinforcing our focus on delivering a more focused Retail business and we made progress on this with £296million of retail sales.
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“All of our offices are in London, and here we expect demand to further polarise towards safe, modern, sustainable and well located workspace. This is exactly what we deliver at our campuses.
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“Sustainability is a key part of that offer, and today we set out ambitious new targets which include delivering a net zero carbon portfolio by 2030.
“Near term, we are expecting the offices market to be more cautious, but we continue to conduct virtual viewings and are encouraged by negotiations we are having.
“In retail, given current valuations and the lack of liquidity in the investment market, our focus is on delivering value though asset management, working to keep our places full and exploiting demand for assets which support an online offer.
“Our financial position is robust with debt low, significant covenant headroom and access to £1.3billion of undrawn facilities and cash so we are well placed to weather today's challenges and succeed in the long term.”